"It means numbers are now at their highest level since records began in 1960 and experts forecast there is worse to come as unemployment rises and people are unable to pay their bills.
There were fears that older people are being hardest hit by the recession as separate figures showed the number of people over 60 being declared bankrupt has risen more than five-fold.
According to the Department of Businesss, there were 5,189 people over 60 declared bankrupt in 2008. The figure for the year 2000 was 802.
The figures were disclosed following written parliamentary questions from Mark Prisk, the Tory Shadow Business Minister.
Mr Prisk said older people were suffering as a result of Labour's policies.
"Pensioners who are already financially vulnerable and are least able to cope with bankruptcy, are being worst hit," he said.
"Individuals should have been encouraged to save not spend, but Labour did the opposite and built an economy on debt."
The number of companies that collapsed also rose by 39.1 per cent year-on-year to 5,055 in the three months to the end of June. Alan Tomlinson, of insolvency practitioners Tomlinsons, described the combination of rising unemployment and unmanageable debt as "the perfect storm".
"Many of the people we're seeing are in serious, serious difficulty," he said.
"The sharp rise in the number of individual insolvencies is a reflection of the ongoing fallout from irresponsible borrowing in the good years and people living beyond, in many cases way beyond, their means."
Mike Gerrard, of the accountants Grant Thornton, said: "The level of unemployment undoubtedly has an effect on the insolvency statistics but we haven't seen the full impact yet. It's the longer term effect of unemployment that will have an impact"
The report also noted that these individual insolvencies consisted of 18,870 bankruptcies, which were up 15.3 per cent on the same period a year ago, and 12,225 Individual Voluntary Arrangements (IVAs), which were up 27.4 per cent on the same period in 2008. For more information on IVAs have a look at the site.
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( 3 / 247 )If you have debts then you will no doubt dream of being able to clear them completely and becoming free. However a number of debt management companies are knowingly preying on people like this and making misleading and false promises. The simple truth is that there is no quick fix and if claims seem too good to be true then they usually are.
"Borrowers are being advised against paying companies that claim to be able to wipe out their debts, as the Ministry of Justice (MoJ) announced yesterday that it has shut down 100 of these firms.
orrowers are being advised against paying companies that claim to be able to wipe out their debts, as the Ministry of Justice (MoJ) announced yesterday that it has shut down 100 of these firms.
These claims management companies cold-call consumers offering to help clear their debts, for a percentage fee. But what they fail to mention is that they have been subject to warnings from several watchdogs, including the Office of Fair Trading (OFT), which is concerned that their claims are misleading.
"Misleading claims that debt can be written off as unenforceable, and high-pressure selling and cold-calling in person will not be tolerated," says Kevin Rousell, head of claims management regulation at the MoJ.
The firms argue that they can challenge the legality of many credit contracts drawn up before April 2007, saying that these are flawed.
"They are referring to the consumer credit legislation - which applied before the Consumer Credit Act 1974 was amended in April 2007 - setting out various key compulsory requirements for lenders, such as that the interest rate has to be stated clearly," says Rousell.
"There are instances where some consumer credit agreements may be unenforceable, but it isn't as simple as people may think. We're working with the OFT to ensure that the firms offering ways out of debt are not misleading people."
If you have debts and wish to start tackling them then you may be suited to an IVA.
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( 3 / 241 )If you have ever been in debt and had to deal with debt collectors then you will know just how stressful it can be. Typically you may receive letters, threats and phone calls at all hours in an attmept to collect the money you owe. It is therefore worth knowing your rights.
"Dealing with debt collectors is one of the staples of work at Citizens Advice, especially since the onset of the credit crunch. Typically, clients receive letters, telephone calls, and home visits – or at least the threat of the latter – from multiple parties. These can include the original creditor, debt collecting agencies and their lawyers. This can be distressing, especially when clients can't afford to pay or don't owe the money claimed. So if you are in this position, what can you do to fend off the debt collectors?
First, ensure the agencies comply with guidance published by the Office of Fair Trading (OFT). This gives examples of unfair debt collection practices, such as ignoring reasonable requests from debtors regarding when and how to be contacted, making debtors engage with multiple agencies and ignoring claims that debts have been settled or disputed and can be viewed here.
It is also worth checking whether a firm is a member of the Credit Services Association (CSA), the national body for debt collectors. The CSA has its own code of practice, which includes a commitment to comply with the OFT's guidelines. It also includes a measure agreed with the government this year in response to the financial crisis, giving debtors a 30-day period of grace from when they first contact an accredited advisory service such as Citizens Advice. The CSA's website includes a procedure for making complaints about members.
If these steps do not work, you could accuse the creditor of harassment. Under the Protection from Harassment Act 1997, a person must not pursue a course of conduct which amounts to such behaviour. If they do, this can be a criminal offence punishable by a fine or imprisonment and a civil wrong giving rise to a damages claim. This year, the Court of Appeal addressed the question of whether debt collection can amount to harassment in the course of a claim against British Gas brought by a former customer, Ms Ferguson. She switched supplier but was pursued by British Gas for further bills"
For further information why not have a look at our guide on creditor harrassment.
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( 3 / 249 )We all dream of winning the lottery. In fact some of us pay hundreds of pounds a month on lottery tickets and never actually win a penny.
Of the lucky few that do, many struggle with the idea of how to spend it and end up keeping it stored away in a bank account untouched.
Some of us have no problem spending it and go away on holidays, buy a massive house, flash car and treat the whole family.
While this is how it is meant to be done, many people have not spent there money wisely and have actually gone bankrupt!
Yes believe it or not there are greedy people out there who spend more than they can afford even if what they can afford is in the millions.
To make sure you don’t fall into the same bankruptcy trap or to feel a little bit better than you are taking control of your finances through an IVA, we at IVA.net have found the five worst lottery wins and how their money literally went straight out of the window.
1.Andrew Jackson “Jack” Whittaker
Andrew was already a millionaire when he won the multistate Powerball lottery in December 2002.
At 55-years-ok he was president of a contracting firm in West Virginia, had a beautiful family, big house and drove a Lincoln Navigator.
On December 25 2002, Whittaker became the biggest single lottery winner in US history, winning $314.9 million jackpot.
He began by spending his millions on building churches and starting a foundation for the less fortunate, but things started to spiral out of control very quickly.
Whittaker was robbed numerous times, once of more than $500,000 at a strip club.
He began to drink heavily and he and his wife divorced.
Atlantic City casinos accused him of bouncing checks and then to make matters worse his granddaughter Brandi, who Whittaker had bought four cars and was very close too, was found dead of a drug overdose. Her drug problem was easily funded by the $2,100 per week allowance he gave her.
2.Alec Ahsoak
What is the chance that a winner of a $500,000 stateside lottery to benefit a nonprofit organisation that aids victims of sexual abuse, would be a convicted sex offender? Well that chance came up.
Alec Ahsoak, 53, who won the jackpot, was convicted of molesting two girls under the age of 13 in 1993 and another girl in 2000.
The mass media quickly publicised his identity which proved to be highly detrimental to his safety.
One afternoon, Ahsoak was walking down the street and was approached by a man and two women who asked him whether he was the guy that had won the $500,000 jackpot.
Once he had revealed his identity, the man struck Ahsoak over the head with a metal pipe eight to ten times.
The injuries were not fatal and the police were unsure whether the attack was related to the lottery winnings as no money was stolen.
The Anchorage Daily News reported that Ahsoak’s victims believed they should benefit for the lottery win as a form of compensation.
3.William “Bud Post”
One day he was the winner of $16.2 million, now William loves in Social Security and food stamps.
As soon as he won the money investors popped out of nowhere and threw “great ideas and desparate circumstances for him to invest in.
Post as also successfully sued by his former girlfriend for a share of his winnings. One of his brothers was arrested for hiring a hitman to kill him so he could inherit a share of the winnings.
His other brothers and sisters convinced him to invest in a car business as well as restaurant both which were unsuccessful.
Within one year Post found himself $1 million in debt and was forced to declare bankruptcy.
4.Evelyn Adams
It is rare to win once on the lottery but twice is just unreal. But Evelyn Adams managed to pull it off. The New Jersey lottery winner won once in 1985 and again in 1986. Too soft with her family and friends (as well as her love for the Atlantic City casino, her inability to say no landed her in the trailer she lives in today.
5.Jeffrey Dampier
Jeffrey really tried to make a go of his lottery win and invest in a business which he deemed as profitable.
Jeffrey believed that a gourmet popcorn store was a profitable and reasonable investment and put a lot of time and money into establishing the business.
He did the usual stuff like take the family on holiday and buy them extravagant gifts but the terrible tragedy came when Dampier was shot dead in the back of a van, seven years after his winning.
Police arrested his sister in law Victoria Jackson and her boyfriend, Nathanial Jackson (last names are coincidental) after kidnapping and murdering Dampier for his money.
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( 3 / 286 )For those that have been or are in debt, you may be familiar with loan sharks. They often charge huge amounts of interest and can make your life a living hell. However one man was today sentenced to five years at Manchester Minshull Street Crown Court for offences including blackmail and illegal money lending.
"Judge Adrian Smith told multi-millionaire Kiely: "It's clear to me you are a ruthless individual who has displayed a high degree of criminal sophistication."
Kiely charged up to 2,437 per cent interest on loans and used an army of enforcers to collect debts owed by poor families on Manchester housing estates, the jury that convicted him last month heard.
One of his victims, Donna Ockerby, 45, claimed she was left fearing for her life and was forced to move to a secret location to escape him.
Kiely was convicted of two counts of blackmail for his actions towards her.
He was also found guilty of one count of acquiring criminal property, two counts of concealing, disguising, converting or transferring criminal property, and two counts of unlawfully failing to give notice of a change in circumstances.
Kiely also admitted, at an earlier hearing, five counts of illegal money lending.
Mrs Ockerby, an auxiliary nurse, borrowed £300 from "Johnny Boy Kiely" to pay for her wedding dress in January 2007 because she was "absolutely desperate", the jury heard.
He dispensed the money from a roll of £20 notes from his black Range Rover, complete with the personalised number plate "B0Y".
Mrs Ockerby said she faced aggressive demands for money when she struggled to repay her debt because her working hours were cut.
On one occasion Kiely turned up unannounced at her semi-detached house and grabbed hold of her. Another time he turned up and banged on her door early in the morning, the court heard.
Mrs Ockerby told the jury she feared for her life when a concrete block was thrown at her window just hours after a debt collector called.
After this incident she moved away from her home in Openshaw, Manchester"
The best advice would be to not use a loan shark no matter how desperate you are. If you already have debt then consider ways such as an IVA or Debt Management.
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